Regional growth fund bids invited

Business Secretary Vince Cable announced the creation of 24 Local Enterprise Partnerships

The Government has been accused of slashing funding for regional growth with a new £1.4 billion fund dismissed as a "pathetic fig leaf" by Labour.

Business Secretary Vince Cable announced the creation of 24 Local Enterprise Partnerships (LEPs) to attract investors and promote businesses across England.

They will be able to support local projects and bid for state funding, with the Government targeting money at areas hit by public spending cuts.

In a Commons statement Mr Cable said £1.4 billion would be available over the next three years "to encourage private sector investment across England, providing support with significant potential for private sector led economic growth and sustainable employment".

He added: "Support will be provided in particular for bids from those English communities which are currently dependent on the public sector so as to help them make the transition to sustainable private sector led growth."

The advisory panel overseeing the fund will be chaired by Conservative former Cabinet minister Lord Heseltine.

The plan, set out in a White Paper, aims to replace the "failed" Regional Development Agencies (RDAs) set up by Labour.

But shadow business secretary John Denham said the plan was a "shambles" and the result of "reckless" cuts. "This statement cuts the resources for regional development by at least two-thirds. RDAs will receive about £1.4 billion this year. The regional growth fund will have £1.4 billion over three years," he said."

He added: "The regional growth fund is a pathetic fig leaf to cover the absence of any growth strategy."

Launching the Local Growth White Paper Mr Cable said: "Local communities and businesses are in the best position to understand the opportunities and needs of their own economies."